79 comments:

stryker reports flat sales because they are no longer the new and exciting company in spine. that distinction belongs to nuva, k2m, the disc guys and anyone who didn't get pigeon holed into me-too fusion.

other new and exciting things? how about the apocalypse facing entire technologies in the US (dynesys)?

The numbers at JNJ and Stryker are flat because the smaller, more agile companies are taking bigger chunks of share. My feeling is that procedures overall are not down, just the proportion going to certain bigger players.

Smaller companies taking bigger chunks of market share? I would venture that many of these smaller companies $10-$15 million are as flat as the legacy companies, if not flatter. It really depends on what segment of the market you are discussing. Biologics? Emerging Technologies? Me-Too Products? Soft Goods? Bone Stimulators? Physician Owned Distributorships? Based on our discussions, everyone is feeling this depressed/recessed economy. Yes there are companies that are receiving investment capital, but these are selective technologies that investors believe have the potential to be disruptive. Where are all the prognosticators and analysts when things are going bad? When times are great, they would crawl up our asses. Any of them willing to make predications now? This is still an attractive industry. Where is Wall Street and the investment community going to find the margins that exist in spine or medical devices? Yet, having to take less, means that we are all going to take less, with the exception of our highly esteemed CEO and senior management. Greedy Pricks and Bastards!

The current state of the industry makes Twiggy look like she has breast. Many companies have decreased their commission plans, have a harder time getting access to their revolving line of credit, and are complaining that it is taking longer than usual to get paid. The days of 20% growth are over for at least two-four years if not longer. Like it or not, we have no one else to blame than ourselves, our elected government officials whom need to be voted out, and our friends on Wall Street. Maybe, this will snap many out of our irrational exuberance. Remember, even the greatest of great Empires collapsed, does anyone think we are immune from it?

Margin compression, lack of product differentiation, increasing patient deductibles equals stagnant industry. The ability to charge dramatic price differences compared to OUS was based on a thriving, growing US economy which is a fond memory.

k2m got purchased- by a 30 billion dollar venture capital firm claiming they will keep buying more device companies, then will go public....interesting, not sure how much i buy into it...but worth mentioning.

Musco man, You said "...Smaller companies taking bigger chunks of market share? I would venture that many of these smaller companies $10-$15 million are as flat as the legacy companies..."These surgeon owned companies may not be blowing it out of the water but the commission is so much higher. Everybody wins!!!!!

As pricing continues to flatten the market along with fewer surgeries one doesn't believe that some of these smaller companies are going to continue paying 30-40% commissions? Enjoy the party while it still goes on because eventually Don Meredeth will be heard in the background singing, "turn on the lights the party's over!" Even the surgeon investors will get tired of subsidizing the venture and realize that the tax write will off set their investment.

what's crazy is that it's still alive and kicking everywhere else in the world? does this mean the FDA is onto something about its hazards that no one else knows or that they are overreacting? either way, once dynesys goes the way of the dinosaur in the US, we'll eiher be missing out or laughing at the poor suckers every else getting ticking time bombs implanted in their backs

30 - 40% commisions!!!-- What are they going to do ?!?! Cut them to 15- 29.5 percent!!! That's still better than anybody else out there. What do the heavy hitters pay in commisions? Trust me, it's embarassing to say the rate....So i won't.

You can also buy in with your relationships and act as an owner. It's the future. Don't ignore it.

As someone who works for a spine company in the $10-15 million sales range mentioned, we have seen record sales this year and our Q2 was our best quarter ever.

This was on pretty much bread and butter metal/PEEK product. So I wouldn't take the Stryker/Depuy/etc. numbers too seriously, there is plenty of business out there if you are willing to work hard for it.

So the question must be asked, how many of your surgeons are consultants, have equity in the company, or, are getting paid under the table. Let's get serious, unless you're selling in some podunk market place, you're not getting your me-too products that easily into major hospitals or hospital buying groups.

Having spent time at Xerox, pharma, and even software I have always been amazed at the lack of sales training in the device industry. Sure there is anatomy, product training, competition and all that but I have yet to see actual sales training with any company. For some of the huge dollars paid out in commissions, why is this missing within companies? Is it all about surgeon consultants and relationships and if so, why should you bother?

Are they going to find a way to turn chicken into xenograft? McFusions perhaps in the future? Or maybe they've found a way to genetically engineer some type of gene therapy, kind of like how KFC has the urban myth about beekless, legless chickens that are pumped with fluids and full grown in two weeks connected to tubes.

There is a proven fact that even if smaller companies offer 40-50% commission, their sales will still only be flat, because they are attracting a "certain" type of distributor. I'm curious as to what exactly the big players are paying in commission, anyone have additional insight?

ya sales will be flat but they can make money-- they aren't in it to create a 100 million dollar company, just consistent fusion cases that will make them more on the side...all pedicle screw patents are up btw. it's a no brainer if you got stones.

Anon 12:00:Hence the Kool-Aid remark! They could have a board game at their sales training, entitled "Guess Which Company We Got This Implant From!" Does anybody mention that company without sarcasm? Even the reps are sarcastic, probably due to the limited job market and their high turnover.

that board game sounds fun. how about a board game about cages???? lets keep the metal seperate. i dont want my scrub tech getting confused. : )how about "is this peek, cfrp, xpekk, pekko, peeko, playdo, or expandable" game!! that would be fun. SPD would want to play for sure.

Years ago they did testing with bovine xenograft bone for structrual use. Didn't turn out so hot. I've heard rumors of using oyster biproducts to make some new BMP as well as some new ceramic bonded metal tempered by a high powered laser called croluminite. Anybody hear anything?

I'm still not seeing the advantage besided possible cost savings (if any) using PEKK, be it carbon fiber reinforced, or whatever. How does this work for imaging properties, subsidence, modulus that tops peek? Both of these "wheels" roll the same, gimme something new!

Amplify is going to cost 10K per level, and it works just as good as wrapping a $4K kit of infuse around a $200 stick of mastergraft. Uninstrumented fusions with Amplify have been reported at around 65%, similar to uninstrumented fusion using Infuse with Mastergraft off-label. So why pay the extra $6K? To make your technique on-label?

Anon 3:11, sounds crazy but word on the street from different sources say it's true. It's out of the hands of the metal reps now, too. There are current studies observing cancer as well. Varied opinions about using it with allograft creating resorbtion and subsidence. Too many other issues from reimbursement, off label use, limited indications with limited implants to use it with, etopic bone growth, etc. Maybe more research should have gone into this besides does it grow bone. Always make sure your prom date doesn't have an Adam's Apple before you get her back to the hotel room after the dance! Some things assumed due to initial observations may end in a big surprise.

We'd all better hope that the Amplify panel meeting goes well next week. PMA approvals in spine industry are rare. If a company spends millions of dollars on the IDE study and then can't get the product approved by the FDA, let alone reimbursed, how long do you think the VC money will keep being invested in spine startups? Lumbar discs..clinical/reimbursment failure. Cervical discs...reimbursment failure. OP-1....FDA approval failure. There's a lot riding on the panel meeting next week for the future direction of the whole spine industry.

I sure that MSD will do its best to sway the FDA. As for VC money? There is plenty of it around, just look at the companies that have raised capital over the last year. Though these companies may not be hardware companies per se, they still have products that are spine-centric. Investors love to gamble, it's their nature. Even when they are wrong, many still tend to believe the situation will right itself. Look at the idiots that continue to invest in Small Bone Innovations. That market does not have anywhere near the legs that Tony V claims, yet people still believe him, even if he has to go to Malaysia to raise capital. An infamous character once said; "the difference between truth and fiction is that fiction only has to make sense."

TSB has not heard any word about X-Spine losing market share or in financial distress, and we have some of the best sources within the industry. I couldn't agree with Anonymous 5:51 that whomever is throwing around this horse manure doesn't have their facts, otherwise, prove it.

'Amplify' is a nice name: It does seem to amplify the problems that already were hinted at in the ALIF and ACDF applications, and that for a long time were ignored. Soft tissue reactions necessitating steroids, which by the way are very effective in preventing bone healing, or surgical decompression. Impressive seromas necessitating drainage to prevent permanent disability, ectopic formation of what a pathologist once described as 'weird' bone inside and outside the canal, sometimes ways distant from the original site of application. Again necessitating further surgeries. It does seem that a lot more than just bone is Amplified.......

who knows about ATEC. That entire ship is run by Foster who lives on the opposite side of the continent. Kuyper is only in there to be a fresher face to investors but really it's Foster calling all the shots. The "acquisition" of scientx was one of the funniest things I've ever seen orchestrated in my life. "Hey guys! What if my medicore spine company in california pretended to buy my other mediocre spine company in france? Would investors think we made a super uber duper company? Let's give it a try!"

In all seriousness, I think ATEC will be fine. However, the histrionics involved in the management and investor relations departments are overly contrived sometimes make me want to puke.

It seems to me that something is cooking about third generation elastomeric discsWhen you see how fast Spinal Kinetics pushed up its M6 sales in Germany taking market leadership over Synthes in just a year you think that this might just be the next thing MDT, Biomet, ZMH have been looking into it very recently

Disk technology will only play outside the US fo the indefinite future. With the current state of the FDA, getting elastomerics approved will be difficult if not impossible. And by the time they are approved, maybe in 7-10 years, the US payors will continue to reject them.

Unless the MDT, ZMH etc. can make a business case to support development for EU-only, these technologies will languish.

Some still show equivalent when not better results than fusion ; with long patient series (up to 10 years) and a rising demandA few european private clinic still live on american patients flying over to get their neck or their back fixedWhat does it take to make the Payor believe ?